Idenix Tumbles On HIV Setback

NEW YORK -- Shares of Idenix Pharmaceuticals Inc. plunged in
premarket trading Thursday after the company said federal
regulators have temporarily halted studies of an HIV and AIDS drug
that the company developed.

Late Wednesday, Idenix said it was informed by its partner ViiV
Healthcare that the Food and Drug Administration placed a clinical
hold on studies of the drug. It did not disclose reasons for the
clinical hold, which prevents further human testing of the drug
until the unspecified problem is resolved. ViiV Healthcare was
running a mid-stage clinical trial of the drug candidate.

Shares of Idenix dropped $1.01, or 25.2 percent, to $3 in
premarket trading. The stock closed at $4.01 Wednesday and has
traded between $2.57 and $6.11 over the last year.

The drug is designated GSK2248761. ViiV Healthcare licensed the
product from Idenix in early 2009, and it is responsible for all
clinical development. ViiV Healthcare is a partnership between
GlaxoSmithKline PLC and Pfizer Inc. that focuses on HIV and AIDS
drugs.

Idenix also said it expects to resume clinical testing of a
potential hepatitis C drug called IDX184 in the second half of
2011. The FDA stopped trials of IDX184 in September because some
healthy patients who were treated with the drug and another Idenix
drug, IDX320, experienced elevated levels of liver enzymes. The FDA
now has a partial clinical hold on IDX184. The upcoming study will
be a mid-stage trial evaluating IDX184 and two standard hepatitis C
therapies.

The Cambridge, Mass., company said it is discontinuing
development of IDX320 because it believes that drug was responsible
for the side effect.

Oppenheimer & Co. analyst Bret Holley said the HIV drug is
"critical" to the value of Idenix’s stock. He downgraded the
shares to "Perform" from "Outperform," and removed his price target
of $5 per share. The developments for the hepatitis C drugs are
good news, Holley wrote, but since additional news on IDX184 is not
likely to come until the end of the year, it is unlikely the stock
will trade much higher.

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